It has been about a month since the last earnings report for Ionis Pharmaceuticals (IONS). Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ionis Pharmaceuticals due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Q2 Earnings & Revenues Miss Estimates
Ionis reported second-quarter 2022 loss of 74 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 61 cents. In the year-ago period, the company had incurred a loss of 57 cents per share.
The bottom line includes expenses related to the Akcea acquisition and restructured European and North American operations and other items. Excluding these non-recurring expenses, loss per share was 56 cents versus 26 cents in the year-ago quarter.
Ionis reported total revenues of $134 million in the second quarter, up 6.3% year over year due to higher R&D revenues, which made up for lower commercial revenues. Sales however missed the Zacks Consensus Estimate of $148.0 million.
Quarter in Detail
Ionis earns commercial revenues, primarily royalty payments on net sales of Spinraza and R&D revenues from partnered medicines.
Commercial revenues were $78 million in the second quarter, down 9.3% year over year.
Commercial revenues from Spinraza royalties were $60 million, down 16.7% year over, due to rising competition in international markets. Revenues from Tegsedi and Waylivra from distribution fees were $10 million compared with $12 million in the year-ago quarter. License and royalty revenues were $8 million in the quarter compared with $2 million in the year-ago quarter.
R&D revenues of $56 million were higher than the year-ago revenues of $40 million, driven by significant partner payments Ionis earned across multiple partnered programs.
Adjusted operating costs rose 26.6% year over year to $195 million in the second quarter, mainly driven by higher R&D costs as the company rapidly advanced its wholly-owned late-stage pipeline. Ionis’ phase III studies doubled over the course of 2021 from three to six. The SG&A expenses decreased in the quarter due to cost efficiencies realized from integrating Akcea and restructuring commercial operations.
Ionis maintained its previously issued financial guidance for the year. The company expects total revenues to be more than $575 million in 2022. Its adjusted net loss is expected to be less than $275 million.
Ionis expects revenues in the third quarter to be similar to the second. In the third quarter, Ionis has already earned nearly $45 million from partners Roche and Biogen.
Adjusted operating expense is expected to be in the range of $825 million to $850 million. R&D costs are expected to increase in the range of 25-30% in 2022 compared with 2021. SG&A costs are expected to be in line with 2021.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
At this time, Ionis Pharmaceuticals has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Ionis Pharmaceuticals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ionis Pharmaceuticals belongs to the Zacks Medical - Drugs industry. Another stock from the same industry, ChemoCentryx (CCXI), has gained 1.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.
ChemoCentryx reported revenues of $11.76 million in the last reported quarter, representing a year-over-year change of +549.7%. EPS of -$0.44 for the same period compares with -$0.56 a year ago.
For the current quarter, ChemoCentryx is expected to post a loss of $0.42 per share, indicating a change of -31.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for ChemoCentryx. Also, the stock has a VGM Score of C.
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